Moody’s lifts UniCredit Bank Austria, debt

Moody's Investors Service said it upgraded the ratings of UniCredit Bank Austria AG, specifically the long-term debt and deposit ratings to Baa1 from Baa2, subordinated debt ratings to Ba1 from Ba2 and the hybrid ratings assigned to its non-cumulative trust preferred securities to Ba3 (hyb) from B1 (hyb).

The agency also upgraded the bank's baseline credit assessment (BCA) to baa3 from ba2 and its adjusted BCA to baa3 from ba1. The long-term counterparty risk assessment was upgraded to A3(cr) from Baa1(cr) and the short-term counterparty risk assessment confirmed at Prime-2(cr).

The Prime-2 short-term deposit and provisional Prime-2 program ratings were affirmed.

The outlook on the long-term debt and deposit ratings is now stable.

Moody’s said the upgrades reflect the material benefits of the fundamental restructuring of UniCredit Bank Austria, which entailed the carve-out and transfer on Oct. 1 of its operations in Central and Eastern European Countries (CEE) to its Italian parent bank, UniCredit SpA (deposits Baa1 stable, debt Baa1 stable, BCA ba1).

The higher ratings take into account the positive effects of the CEE business carve-out on the bank’s asset risk, regulatory capital ratios and funding profile, in particular against the change of the macro profile to strong + from moderate +, the agency added.

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